Blueprint for ‘Biotech’

Biotechnology players in India can boast of a steady performance but what are they doing to grow to the next level? A glimpse into the minds of four CEOs. By Usha Sharma

‘There will be a lot of partnerships and collaborations’

Dr P M Murali

The key to succeed in this sector is to have adequate capital and sustained capital raise over the years of development which will allow the company’s platforms or technology to blossom. It is obvious that any bioteh company can not stop at thinking it is Indian. The business is going to be international and capital will have to flow from outside the country as well. So the key is to build a leadership team which is truly international so that the main requirement of running the company is met.

The second area is to ensure that there are world class people and good infrastructure. We can be thrifty to make ourselves cost competitive but never present ourselves as cheap. While one company builds itself an ecosystem slowly emerges around it which spurs more growth. So the other area which needs attention is which of the states in India is progressive so that the company will soon have a cluster built around it. These are some of the fundamentals which will allow companies to have the spot light on themselves.

Once the above fundamentals are in place, companies can focus extensively on their global market strategy. A lot here depends on the product and the geography they are focusing on. If it is the traditional US market, then it is obvious that our companies will also have to play by the global rule book. Very high quality and reliable supply chain. It is evident that there will be a lot of partnerships and collaborations as this would be the way for most institutions to share resources and expand quickly.

It is likely that India would work towards leadership in biosimilar and biologics. Cancer would be a focus area and also areas where big pharma companies’ have not invested. Management of most companies will be scanning the intellectual property landscape working at the back end to hit the market when they obtain the freedom to operate. Timing is the key to emerge as the leader and like an orchestra conductor, the CEO will have to ensure that all the components of the business play together. Unlike in other countries where there is a well-oiled biotech system, India still does not have one and hence the challenges will be stiffer than most other places on the globe. Companies will still have to figure out ways to tap into public market for funds which is currently not very favourable. Overall management of companies will be trying to complement the missing elements of doing business in India and will look outwards for funds, talent and markets.

– Dr PM Murali, Chief Executive Officer & Managing Director, Evolva

‘The winning strategies for Indian industry would be to embrace the learning’

Swapan Bhattacharya

Due to the lack of venture funding, biotechnology start-ups are rare in India. However, Indian clinical research organisations can play a critical role in the innovation of novel drug candidates in collaboration with pharma/biotech companies. This involves knowledge transfers as well as funding support from the pharma/biotech partners. While the resulting “asset” may not be a final product, new molecular entities (‘NMEs’) delivered by such collaborations can offer significant value for high priority drug development candidates. TCG Lifesciences (“TCGLS”) alone has delivered four such assets in the past three years.

The principal value proposition in this domain that TCGLS offers is its ability to combine knowledge, time/cost efficiency and flexibility in performing the iterative process of Structure Activity Relationship (“SAR”). Some of the essential strengths and expertise TCGLS brings to bear include

(i) speed in compound synthesis as a live SAR demands molecules in its loop as quickly possible to make decision making and taking SAR forward;

(ii) ability to problem solve as the target molecules are novel and unprecedented;

(iii) ability to evolve complementary skills in “route design” to support “compound design” process;

(iv) fast decision making with a propensity to “kill” compounds which are likely to fail; and

(v) flexibly apply the appropriate scientific domains with multidisciplinary scientists and technology platforms. At TCGLS, we address all these parameters; both in isolation and in a holistic manner wherever they are interconnected. This is a complex process and involves continuous learning of design/problem solving/synthesis aspects, parallel optimisation abilities, continuous improvements in cycle time and productivity specially in the area of purification sciences, optimising procurement and logistics systems, real-time and interactive data sharing and communication system through a web enabled electronic lab notebook system, establishing high throughput biological screening and profiling systems and high end in vivo study platforms.

Development of such expertise has taken time and considerable investment – two of the pre-requisites to play this game. TCGLS was first Indian CRO to set up its biology lab and invested in diverse assay platforms (GPCR, ion channels, kinases etc), and compound handling automation systems. Today TCGLS is considered to be the leader in assay/screening in India. TCGLS is also the first to set up parallel/library synthesis through its collaboration with discovery partners, the technology leader in 2002 and has maintained its lead in this domain. Failure is a constant companion of drug researchers; but the ability to learn from its mistakes and to rapidly produce new and improved compounds are vital to success. TCGLS, over the years of working with the best minds and cutting edge technology of its western partners, has established best practices and efficiencies at par with the best global players. The challenge of drug discovery to address unmet medical needs continues to be the need of the hour. India’s contribution in this regard has been limited in terms of “disruptive innovation”. We have played an important role in “incremental innovation” by bringing down cost of medication through generic medicines, but surely the drug industry in India can play a more pivotal role! The winning strategies for Indian industry would be to embrace the learning that has happened through engagement with innovation leaders in the West and to apply the knowledge and best practices to focus on new drug development. Our scientific and engineering talents play a leading role in driving innovation outside India. China has propelled itself forward in the drug R&D field as recently as the past decade through start-up biotechs, local pharma/CRO partnerships and leveraging domestic academic and traditional medicine strengths. India can apply some of the same measures and strategies for bringing in first-in-class remedies for diseases endemic to India, particularly those that are not the focus of the innovators in the West. The science and business of drug discovery and development is constantly evolving due to its intrinsic complexity and challenges. TCGLS is continuously focusing on its strategy of investing in new technology platforms and domain expertise in diverse therapeutic segments. It is already collaborating with a few of the pharma/biotech players in India and also reaching out to other Indian companies to develop win-win collaborations for the future.

– Swapan Bhattacharya, Managing Director, TCG Lifesciences

‘Formidable challenges in addressing opportunities’

K V Subramaniam

India has an opportunity to be a global leader in the world of biotechnology particularly in vaccines and biosimilars. India is already playing a major role as an important source of quality vaccines for life-threatening diseases at a very competitive prices for the developing world. This can be enhanced with a number of other vaccines for life-threatening vaccines as well as for life-style diseases.

As regards biosimilars, large sections of society in the developing world are not able to afford high-priced biopharmaceuticals, most of which meet critical health care needs. Even if some sections of society are able to afford to an extent, health care practitioners have to resort to sub-optimal dosages.

However, there are several formidable challenges in addressing these opportunities. These are primarily in significant investments involved, long gestation periods, high-end competencies required, increasingly demanding regulatory environment, and in being able to meet high-quality standards.

Reliance Life Sciences (RLS) has been addressing the biosimilars opportunity by developing an array of biosimilar products.

RLS has invested significantly in creating the infrastructure, having competencies across the value chain, investing significant capital in product development, pre-clinical and clinical studies and in quality management.

RLS believes that a strong emphasis on quality and cost-competitiveness, through in-house research, process development, manufacturing, pre-clinical and clinical research, and strong quality management systems and processes, will help it address the larger global opportunity.

– KV Subramaniam, President & Chief Executive Officer, Reliance Life Sciences

‘Biosimilars is a compelling opportunity for emerging economies such as China, India, Brazil’

Binish Chudgar

India’s pharma industry is one of the most mature and thriving industries in the country. Having started under the protectionist era, the industry has thrived in the post liberalisation phase. From a mere Rs 10 crores industry at the time of independence in 1947, the Indian pharma sector has grown to an estimated $17 billion in 2012. It is expected that the industry will reach about $36 billion in 2016. Upto now, factors such as changing demographics, globalisation of our economy, cost competitiveness, favorable patent regime (in the past) and pricing policy were the key drivers of this growth. However, as we look into the crystal ball many new and emerging factors will influence the Indian and global pharma market. Key among these is the growing prominence of the biopharmaceutical (biologics) sector.

In the year 2010, as per IMS estimates, the global spend on biologics was $138 billion or about 16 per cent of the total spend. Of this, biosimilars spending was only $0.3 billion (a mere 0.2 per cent). However it is estimated that the biosimilars opportunity will grow to about $2.0 billion by 2015 and could be anywhere between $11.0 billion to $25 billion by 2020. The EU is currently in the driver seat due to early adoption of regulatory pathway for biosimilars. It is expected that the EU growth of biosimilars would continue with key drivers being further clarity of regulations, patent cliff and countries that were slow adapters following the leading adapters of biosimilars. The opportunity becomes more compelling due to the currently prevalent economic conditions. As we all know, the world is going through a recessionary phase currently. Most economies are struggling to meet their healthcare bills and there is immense pressure building up to stem the rising healthcare costs. This becomes even more relevant for the future as people are living longer and hence will require healthcare coverage for more number of years. There are 18 biosimilars approved in EU (as of November 2013) including the first mAb infliximab. From India, Intas is the only Indian company currently to have a product approved in the EU (through a partner). The US represents the highest potential latent demand for Biosimilars. It is the biggest market for biologics (over 50 per cent of the global sales) but has been slow in the adoption of biosimilars. With the Patient Protection and Affordable Care Act (Obamacare) coming into effect and the adoption of biosimilar regulatory pathway similar to EU, coupled with the patent cliff for most blockbuster biologics, the US is forecasted to be the single biggest opportunity for biosimilars by 2020.

Biosimilars is also a compelling opportunity for emerging economies such as China, India, Brazil etc. With vast populations and a need to expand the healthcare coverage while balancing the limited resources, the availability of biosimilars at lower costs would play a major role in these markets. In cases such as India, this is also coupled with the need to attract foreign investment and creating manufacturing and R&D centers. Most countries in this third category already have developed their own regulatory pathway for biosimilars. Coming to novel biologics, we are seeing some emerging trends in R&D and particularly Biopharmaceutical R&D. We find that more and more companies are rationalising their R&D costs through better utilisation of resources, recognising drug candidate failures at earlier stages, greater focus on discovery of biologics and thereby improvements in the protein design and characterisation techniques, migration of drug discovery to the Asian countries, as well as through industry consolidation especially acquisition of biotech companies by the larger pharma companies. Globally, higher focus is on the R&D of biopharmaceuticals and it is estimated that already >40 per cent of all pharma industry research is in novel biologics rather than chemical drugs. Many large pharma companies invest greater than half to almost all of their R&D expenditures on biopharmaceuticals with a large concentration on monoclonal antibodies and cancer drugs. Biologics have evolved so rapidly over the past several years that 5 of the top 10 prescription drugs in the year 2012 were biologics with combined sales of ~$36 billion of the total sales of $ ~73 billion for top 10 drugs.

– Binish Chudgar, Vice Chairman & Managing Director, Intas Pharmaceuticals

The four CEOs have presented their take on industry trends as well as a glimpse into the strategies being followed at their companies. CEOs aiming to better access global opportunities should also attempt to create a confidence among multinational players to do business in India. In the long term this blueprint will spur growth and help the industry to win the race.

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